State of Illinois v. American Federation of State, County & Municipal Employees, Council 31
2016 IL 118422
| Ill. | 2016Background
- AFSCME and the State (CMS) had a multiyear collective bargaining agreement (CBA) effective 2008–2012 providing scheduled wage increases, including a 4% raise effective July 1, 2011 (later split by cost-savings agreements into 2% on July 1, 2011 and 2% on Feb 1, 2012).
- Due to the fiscal crisis and legislative appropriations, the Governor’s Office of Management and Budget determined appropriations were insufficient to pay the July 1, 2011 increase for 14 executive agencies; CMS notified affected agencies staff that the increases could not be implemented where appropriations were lacking.
- AFSCME initiated arbitration; arbitrator enforced the CBA and ordered immediate payment of the 2% increase and make-whole relief, declining to decide statutory or constitutional public-policy issues.
- State sought vacatur in circuit court arguing section 21 of the Illinois Public Labor Relations Act and the Illinois Constitution’s appropriations clause make multiyear CBAs subject to legislative appropriation; circuit court remanded to determine sufficiency of appropriations and then confirmed the award with timing modifications.
- Appellate court reversed and ordered confirmation of the award in full; Illinois Supreme Court granted review and held the arbitrator’s award drew its essence from the CBA but vacated the award because it violated public policy (appropriations clause and section 21 of the Act).
Issues
| Issue | State's Argument | AFSCME's Argument | Held |
|---|---|---|---|
| Did the arbitrator’s award draw its essence from the CBA? | Arbitrator ignored CBA’s "cannot supersede law" clause and failed to give effect to appropriation contingency. | CBA language mandating pay increases was clear and unconditional; arbitrator properly enforced contract terms. | Held: Award drew its essence from the CBA; arbitrator acted within authority and applied contract principles. |
| Are multiyear CBAs with the State subject to the General Assembly’s appropriation power? | Yes — section 21 and the constitutional appropriations clause make such CBAs subject to appropriations. | No — making CBA funding contingent on appropriation renders public bargaining meaningless. | Held: Yes — section 21 (and the Constitution) establish a public-policy appropriation contingency for multiyear CBAs with the State. |
| Does enforcing the arbitrator’s award (immediate payment regardless of appropriation) violate a well-defined public policy? | The award contravenes the appropriation clause and section 21, so it violates dominant public policy and must be vacated. | Public policy favors holding the State to its contractual obligations; lack of appropriation may delay enforcement but does not erase the obligation. | Held: The award violated public policy because it ordered payment without regard to legislative appropriations; the award was vacated. |
| Could the arbitrator decide statutory/constitutional public-policy defenses? | State: arbitrator should have given effect to statutory/constitutional limits incorporated into the CBA. | AFSCME: arbitrator’s role is to apply the CBA language; public-policy/statutory interpretation is for courts. | Held: Arbitrator declined to decide statutory/constitutional questions; Court accepted that such issues are for courts, but nonetheless found the award violative of public policy and vacated it. |
Key Cases Cited
- Griggsville–Perry Community Unit School Dist. No. 4 v. Ill. Educ. Labor Relations Bd., 2013 IL 113721 (arbitration-review standard; award must draw its essence from the CBA)
- AFSCME v. State, 124 Ill. 2d 246 (1988) (arbitration enforcement limits and public-policy exception)
- AFSCME v. Dep’t of Central Mgmt. Servs., 173 Ill. 2d 299 (1996) (scope of judicial review of arbitration awards in public sector)
- Bd. of Trustees of Community Coll. Dist. No. 508 v. Cook County College Teachers Union, 74 Ill. 2d 412 (public-policy grounds to refuse enforcement of agreements)
- Bd. of Trustees of Community Coll. Dist. No. 508 v. Burris, 118 Ill. 2d 465 (definition of appropriation and legislative power)
- Orenic v. Ill. State Labor Relations Bd., 127 Ill. 2d 453 (Legislature’s appropriation authority and employer definition)
- In re Pension Reform Litig. (Heaton), 2015 IL 118585 (contract-clause scrutiny when State impairs contracts)